How does the Equivalent Annual Cost (EAC) Calculator work?
Given 2 Items/machines with an Investment Cost, expected lifetime, and maintenance cost, this will calculate the EAC for each Item/machine as well as draw a conclusion on which project to invest in. This calculator has 7 inputs.
What 1 formula is used for the Equivalent Annual Cost (EAC) Calculator?
v = 1 / (1 + Cost of Capital) Discount Factor = (1 - vn) / Cost of Capital
What 4 concepts are covered in the Equivalent Annual Cost (EAC) Calculator?
annuity
A stream of payments
equivalent annual cost (eac)
investment
an asset or item acquired with the goal of generating income or appreciation.
present value
the value in the present of a sum of money, in contrast to some future value it will have when it has been invested at compound interest. PV = FV/(1 + i)n where I is the interest rate per period, PV = Present Value, and FV = Future Value
